THE Bank of Tanzania (BoT) has said Tanzania economy is expected to bounce back to 6 per cent this year from 5.5 per cent projected last year.
“Yes various challenges reduced our expectations but we project the economy to bounce back to 6.0 per cent this year,” said the BoT Economics Department Assistant Manager, Aristedes Mrema during the financial journalists’ seminar taking place in Mtwara.
He said due to coronavirus pandemic the country reversed and lowered the GDP growth projection to 5.5 per cent from 7.0 per cent though the World Bank forecast was low. The 2019 GDP grew by 7.3 per cent and would it not be the covid-19 the country’s economic growth could have hit a new ceiling.
“The pandemic slowed down the growth and we could have been talking about some exciting news,” Mr Mrema said. Due to the challenges posed by Covid-19, the Central Bank said it is likely that country’s economy will meet the growth target of 5.5 per cent in 2020 as projected.
The central bank projection based on the fact that in the first nine months of last year to September the GDP reached 4.7 per cent before factoring in last quarter growth. He said the remaining 0.8 per cent was likely to be reached in quarter four for three months to last December.
“It’s likely our GDP projection of 5.5 per cent will be met. We know in last quarter of the year economic activities are many to warrant meeting the expectation,” Mr Mrema, who is an economist for Southern Eastern Zone based in Mtwara, said.
According to BoT Monetary Policy Statement for 2020/21, the 4.7 per cent GDP growth registered in the first three quarters of the year 2020, compared to 7.3 per cent in the corresponding period of 2019 and 6.9 per cent in 2018, mostly driven by construction, agriculture, transport, and mining and quarrying.
The activities benefited from the government decision of not imposing a nationwide lockdown of the economy because of the Covid-19, as well as fiscal and monetary policies implemented to cushion the economy from the adverse impact of the pandemic.
The growth of the economy is projected at 5.5 percent and 6.0 percent in 2020 and 2021, respectively.
The growth projection in 2021 is slightly higher than the World Bank projection of 5.5 per cent.